Ivo Daalder, former U.S. ambassador to NATO, is a senior fellow at Harvard University’s Belfer Center and host of the weekly podcast “World Review with Ivo Daalder.” He writes POLITICO’s From Across the Pond column.
As another tariff deadline fast approached, U.S. President Donald Trump once again decided to extend it — this time to Aug. 1.
To many observers, this behavior has become the norm. Indeed, many commentators, analysts and even the markets seem to believe the new August deadline means no more than the ones that came before. “Over the last couple of months, we’ve seen the administration escalate, only to quickly de-escalate, and this could also just be another tactical escalation in some way,” said Wall Street analyst Nadia Lovell.
They’ve even coined a name for it: TACO — Trump Always Chickens Out.
Trump, meanwhile, aware of his reputation, insists this time is different. “TARIFFS WILL START BEING PAID ON AUGUST 1, 2025,” he declared. “No extensions will be granted.”
So, what will it be? Will the U.S. leader blink again in a few weeks? Or will this time really be different?
The difficulty in answering these questions is that there are two Trumps: One is Trump, the Dealmaker — the brash, promise-too-much and deliver-too-little, larger-than-life persona behind “The Art of the Deal.” It is the side of him that so effectively monetized his brand in “The Apprentice” and franchised his name to hotels, golf courses, steaks, wine — even meme coins and mobile phones.
The other is Trump, the Tariff Man — railing against free trade for decades and believing other countries are “ripping off” of the U.S. “Countries like Japan, China, and others are laughing at us,” he told CNN’s Larry King in 1999. “They have huge surpluses, and we have huge deficits. I’d put a tax on their goods to level the playing field.” It is the side of him that 25 years later, proclaimed tariffs to be “the most beautiful word in the dictionary.”
Yet, both in the run-up to the election and since taking office, many assumed the U.S. leader’s tariff threats simply reflected his penchant for dealmaking. Indeed, when Trump first extended his “liberation day” tariff deadline to July 9, his chief trade adviser Peter Navarro promised Trump would negotiate “90 deals in 90 days.”
But those 90 days have come and gone. And in that time, Trump has finalized just two interim deals, one with Vietnam and one with the U.K., and most of their details are yet to be finalized let alone negotiated. (A third “deal” with China was really only a ceasefire in the escalating war of tariffs, export controls and sanctions, effectively returning the situation to where it was in early April).
All the while, many countries are still scrambling to get a deal before the end of July, including the EU, Canada, Japan, Mexico, and all the other countries that have received a presidential letter indicating what their tariff levels will be as of the August deadline.
But even if some deals are struck by then, they will likely be few in number and alarmingly short on details. The truth is, despite his reputation as a dealmaker, Trump is, above all, a tariff man. Even with the postponement of prior deadlines, he has effectively raised tariffs on imports into the U.S. to levels unseen in nearly a century.
Trump views tariffs in three ways: He believes they are an efficient and cheap way to raise revenue, which is why his 10 percent “reciprocal tariff” minimum on all trading partners is likely to stay.
He also believes other countries have been stealing U.S. jobs and manufacturing capabilities, and he wants them back. His sectoral tariffs on automobiles, steel, aluminum, copper and soon likely on pharmaceuticals, semiconductors, lumber and other products are meant to strengthen U.S. capacity at home. Therefore, these, too, are likely to remain.
Finally, he believes tariffs can compensate for, or even eliminate, bilateral trade deficits, and the deals he seeks are focused on addressing this long-standing concern. It doesn’t matter that bilateral deficits in goods tell us nothing about economic strength — as any economist will tell you. Trump sees deficits as a loss and surpluses as a gain. And he sees himself as a winner.
Then, there’s the fact that Trump believes he can win the tariff game, and that U.S. economic might means others will have to do his bidding. “We are a department store, and we set the price,” he told Time Magazine. “I set a fair price, what I consider to be a fair price, and they can pay it, or they don’t have to pay it. They don’t have to do business with the United States, but I set a tariff on countries.”
Of all his views on tariffs and the economy, it is this idea that the U.S. holds all the cards — that he has all the leverage and others will do his bidding — which will likely prove the most misguided. The president often forgets others have choices, including the choice to shop at another department store or not shop at all. And that is exactly what is happening.
America’s allies in Asia, Europe and North America are increasingly looking to each other to reaffirm global trade rules and strengthen trading bonds. They are “derisking” their economies from Trump’s America. And the EU is looking to forge an agreement with the 11 Asia-Pacific countries that signed the Comprehensive and Progressive Agreement Trans-Pacific Partnership on new trading rules, which would exclude not only China but also the U.S.
Other large economies, notably those in the BRICS grouping, are strengthening economic ties too — and often at the expense of the U.S. At their summit last week, they largely ignored Trump’s threat of additional tariffs and just moved on to discuss new areas of cooperation.
Even countries in America’s own hemisphere, like Colombia and Brazil, are turning toward Beijing and away from Washington. And while Canada is still hoping for a deal, it is hedging its bets by strengthening ties with Europe and trying to redirect its economy’s north-south focus toward east-west instead.
As more countries come to realize there is no fair deal to be made, they will likely look for economic opportunities elsewhere too, often no matter the short-term cost of transitioning. This is the new world Trump is helping to forge.
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